Cloudflare, Inc.

New York Stock Exchange
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Bullish +65

Scotiabank Upgrades Cloudflare (NYSE:NET) to Sector Outperform

📈 Scotiabank upgrades Cloudflare to 'sector outperform' and raises the price target to $300.00 from $225.00.

💰 Revenue surged 33.5% year-over-year to $639.75 million, beating analyst estimates of $620.83 million.

📊 EPS beat consensus at $0.25 versus the expected $0.23 for the quarter ending May 7th.

🎯 Management raised FY 2026 guidance to $1.19-$1.20 EPS and set Q2 2026 guidance at $0.27.

🤝 CEO Matthew Prince sold $12.9 million of shares, while co-founder Michelle Zatlyn sold $5.6 million.

📉 Total insider sales reached $149 million over the last three months under Rule 10b5-1 plans.

🏦 Institutional ownership stands at 82.68%, with Ameriflex Group increasing its position by 105.6%.

📉 Guggenheim maintains a 'sell' rating with a $140 price target, contrasting other bullish analysts.

🌐 Cloudflare expands offerings in edge computing and developer platforms alongside core security services.

📈 The average analyst price target is $244.23 based on 22 buy ratings against six holds.

Bullish Signals
  • Scotiabank upgraded the stock to 'sector outperform' with a new $300 price target, suggesting significant upside potential.
  • Revenue grew robustly by 33.5% year-over-year to reach $639.75 million, demonstrating strong top-line momentum.
  • The company beat quarterly earnings estimates, reporting $0.25 EPS compared to the consensus of $0.23.
  • Management provided clear forward guidance with FY 2026 EPS targets between $1.19 and $1.20.
  • Multiple major analysts including Morgan Stanley and Needham have raised price targets or maintained strong buy ratings.
  • Institutional investors are accumulating shares, with Ameriflex Group increasing its stake by over 100%.
Risk Factors
  • CEO Matthew Prince sold $12.9 million of shares and co-founder Michelle Zatlyn sold $5.6 million recently.
  • Total insider sales amounted to $149 million in the last three months, indicating reduced personal holdings.
  • Guggenheim maintains a 'sell' rating with a low $140 price target, creating analyst divergence.
Full Analysis
Scotiabank upgraded Cloudflare (NYSE:NET) from a 'sector perform' to a 'sector outperform' rating, raising its price target to $300.00 from $225.00, implying roughly 21% upside. This move aligns with recent bullish sentiment from other major analysts, including Citizens JMP ($270 target), Morgan Stanley ($305 target), and Needham (raised to $280 buy), though Guggenheim maintains a sell rating at $140. The company recently reported strong quarterly results with revenue of $639.75 million, beating estimates by nearly 3% and growing 33.5% year-over-year. Earnings per share were $0.25 versus the consensus of $0.23. Management provided FY 2026 EPS guidance between $1.19 and $1.20, while Q2 2026 guidance stands at $0.27. Insider activity saw CEO Matthew Prince sell over $12.9 million of shares and co-founder Michelle Zatlyn sell $5.6 million under pre-arranged Rule 10b5-1 plans, with total insider sales reaching nearly $149 million in the last three months. Despite this, institutional ownership remains high at 82.68%, with firms like Ameriflex Group increasing stakes significantly. Cloudflare continues to expand its web infrastructure and security portfolio, offering core services like CDN, DDoS protection, and WAF alongside new edge computing and developer platform tools. The stock currently trades with a consensus average price target of $244.23 based on 22 buy ratings versus six holds and three sells.